Audit of the 1996 Fund Allocation and Recovery Charges

(Audit Report No. 98-008, January 14, 1998)


The Office of Inspector General (OIG) completed an audit of the Federal Deposit Insurance Corporationís (FDIC) 1996 fund allocation and recovery charges. The audit was performed by KPMG Peat Marwick LLP, an accounting firm hired to provide auditing services for the OIG. The objectives of the audit were to (1) assess the appropriateness of charges to the Corporate Funds, Corporate Common Services Fund and Financial Institutions (FINs); (2) evaluate the adequacy of methods and controls, and the reasonableness of the charges allocated from the CCS to the Corporate Funds and the RTC; (3) evaluate the adequacy of the methods and controls over the Corporate charges to and recovery of expenditures from the FINs; and (4) follow up on actions taken to address the condition noted in the prior audit of fund allocation and recovery charges.

The results showed for the year ended December 31, 1996, the FDIC implemented appropriate methods, controls, and processes that, in all material aspects, properly processed and recorded 9.4 million transactions totaling approximately $1.7 billion to the Funds, Corporate Common Services (CCS) and FINs. Our audit identified exceptions that did not materially affect the Funds' balances. Additionally, the Division of Finance has implemented effective initiatives to address the condition and recommendation identified in the OIGís 1995 fund allocation and recovery charges report.


The OIG recommended that the Division of Finance management

(1) emphasize to responsible supervisors that they need to maintain adequate documentation and provide training as needed on submitting, documenting, and coding charges to the various funds,

(2) continue to monitor the progress of several ongoing projects aimed at improving the efficiency and eliminating the manual processes involved in recording charges, and

(3) ensure that the $3.2 million adjustment to the RTC and BIF Funds is recorded during 1997 to establish the appropriate fund balance in each fund going forward.

Management Response

On October 10, 1997, the OIG received a written response from the Chief, Operations Support Section through the Associate Director, Division of Finance, to the OIGís September 16, 1997, draft of this report. The written response provided the requisites for management decisions for recommendations 1 and 3. Subsequently, the audit liaison provided more specific information concerning recommendation 2 that provided the requisites for a management decision.

The results of the audit were used by the U.S. General Accounting Office during its review of FDICís 1996 financial statements.

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